Mitsubishi Heavy Industries Ltd's Dividend Analysis
Assessing the Sustainability and Growth of MHVYF's Dividend
Mitsubishi Heavy Industries Ltd(MHVYF) recently announced a dividend of $80 per share, payable on 0000-00-00, with the ex-dividend date set for 2024-03-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Mitsubishi Heavy Industries Ltd's dividend performance and assess its sustainability.
What Does Mitsubishi Heavy Industries Ltd Do?
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Mitsubishi Heavy Industries Ltd is engaged in the manufacturing and sale of ships, industrial machinery, and aircraft. The segments of the company are Energy, Plants and Infrastructure Systems, Logistics, Thermal and Drive Systems, and Aircraft, Defense, and Space. The company earns maximum revenue from the energy segment which handles clean gas, steam power systems, nuclear power systems, compressors, and marine machinery. The Plants and Infrastructure Systems segment of the company deals with commercial ships, engineering, machine tools, and machinery systems; Logistics, Thermal, and Drive Systems provide material handling systems, engines, HVAC systems, and automotive air-conditioners; and the Aircraft, Defense, and Space cover commercial aircraft, defense aircraft, and others.
A Glimpse at Mitsubishi Heavy Industries Ltd's Dividend History
Mitsubishi Heavy Industries Ltd has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Mitsubishi Heavy Industries Ltd's Dividend Yield and Growth
As of today, Mitsubishi Heavy Industries Ltd currently has a 12-month trailing dividend yield of 1.11% and a 12-month forward dividend yield of 1.28%. This suggests an expectation of increased dividend payments over the next 12 months.
Mitsubishi Heavy Industries Ltd's dividend yield of 1.11% is near a 10-year low and underperforms than 65.04% of global competitors in the Industrial Products industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, Mitsubishi Heavy Industries Ltd's annual dividend growth rate was -4.70%. Extended to a five-year horizon, this rate increased to 5.60% per year. And over the past decade, Mitsubishi Heavy Industries Ltd's annual dividends per share growth rate stands at 2.50%.
Based on Mitsubishi Heavy Industries Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Mitsubishi Heavy Industries Ltd stock as of today is approximately 1.46%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Mitsubishi Heavy Industries Ltd's dividend payout ratio is 0.25.
Mitsubishi Heavy Industries Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Mitsubishi Heavy Industries Ltd's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Mitsubishi Heavy Industries Ltd's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Mitsubishi Heavy Industries Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Mitsubishi Heavy Industries Ltd's revenue has increased by approximately 1.30% per year on average, a rate that underperforms than approximately 70.39% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Mitsubishi Heavy Industries Ltd's earnings increased by approximately 14.40% per year on average, a rate that underperforms than approximately 46.62% of global competitors.
Concluding Insights on MHVYF's Dividend Profile
Concluding our analysis, Mitsubishi Heavy Industries Ltd's dividend payments, while consistent, present a mixed picture in terms of yield attractiveness and growth prospects. The modest payout ratio indicates a balance between rewarding shareholders and retaining earnings for future endeavors, which is corroborated by the company's fair profitability and growth ranks. However, the below-average dividend yield and mixed performance in revenue and earnings growth compared to industry peers warrant careful consideration by value investors. As the landscape of the Industrial Products sector evolves, it will be essential to monitor how Mitsubishi Heavy Industries Ltd adapts and whether its dividend strategy aligns with the broader market trends and investor expectations.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
